Privacy Act of 1974: Altered System of Records

Federal RegisterJan 6, 1997

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Office of the Secretary

Privacy Act of 1974: Altered System of Records

AGENCY: Office of the Assistant Secretary for Management and Budget,

Office of the Secretary, HHS.

ACTION: Notice of an altered system of records.

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SUMMARY: In accordance with the requirements of the Privacy Act, the

U.S. Department of Health and Human Services (HHS) is publishing a

notice of a proposed altered system of records, 09-90-0024, ``Financial

Transactions of HHS Accounting and Finance Offices.'' The principal

purpose for the changes is in order to comply with the requirements of

the Debt Collection Improvement Act of 1996 (Pub. L. 104-134, Sec.

31001). The proposal includes new and modified routine uses described

below for this system.

DATES: HHS submitted a report of an altered system to the Office of

Management and Budget and to the Congress on December 24, 1996. The new

routine uses and the amendments to existing routine uses will take

effect without further notice 40 days after the date of publication,

unless HHS receives comments which would result in a contrary

determination. Other changes incorporated in the notice below will take

effect upon publication.

ADDRESSES: Please address comments to: Deputy Assistant Secretary,

Finance Room 739-H, Hubert H. Humphrey Building, 200 Independence Ave.,

SW, Washington, D.C. 20201. Comments received will be available for

inspection at this same address from 9 a.m. to 3 p.m. Monday through

Friday.

FOR FURTHER INFORMATION CONTACT: Ms. Sue Mundstuk Privacy Act

Coordinator, Office of Financial Policy, DASF/ASMB, Room 705-D, Hubert

H. Humphrey Building, 200 Independence Ave, SW, Washington, D.C. 20201,

Telephone: (202) 690-6228.

SUPPLEMENTARY INFORMATION: The system notice was last published in full

at 59 FR 7675 (1994). It was subsequently amended at 59 FR 55845

(1994).

On April 26, 1996, the Congress passed Pub. L. 104-134, Sec. 31001

known as the ``Debt Collection Improvement Act of 1996'' (DCIA). The

purposes of this Act are to: (1) maximize collections of delinquent

debts owed to the Government, (2) minimize the costs of debt

collection, (3) reduce losses arising from debt management activities,

(4) ensure that the public is fully informed of the Federal

Government's debt collection policies, (5) ensure debtors are cognizant

of their financial obligations to repay amounts owed to the Government,

(6) ensure that debtors have all appropriate due process rights,

including the ability to verify, challenge, and compromise claims, and

access to administrative appeals procedures, and (7) encourage

agencies, when appropriate to sell delinquent debts, particularly debts

with underlying collateral, and rely on the experience and expertise of

private sector professionals to provide debt collection services to

Federal agencies.

The DCIA authorizes and requires several new techniques for

collecting debts and claims, and we have modified existing routine uses

and added ones to implement this statute. In particular, we have

modified use 1 to provide for payment by methods other than checks.

We have amended use 11(b) to allow disclosure to the Treasury

Department for purposes of administrative offset even when Treasury

will not be the agency that effects the offset. We have amended use

11(e) to conform with the provision for using debt collection agents or

contractors in the statute as amended by the DCIA. We have added uses

18-21 to provide for new techniques authorized by the DCIA. Use 18

allows the computer matching of debtors and federal employees. Use 19

allows disclosures to commercial reporting agencies.

Use 20 allows disclosure to Treasury or a Debt Collection Center to

collect the debt. Use 21 allows disclosures in connection with selling

the debt. Because all of these are for purposes of recovering or

liquidating debts, they are compatible with the purposes for which HHS

maintains this system.

Other revisions were made (1) to eliminate areas where the Social

Security Administration (SSA) is referenced since SSA is no longer a

part of HHS; (2) to improve the quality of the document by making minor

editorial changes; and (3) to combine the two Appendices into one

Appendix, including the updating of system records locations.

The complete system notice is republished below.

Dated: December 23, 1996.

John J. Callahan,

Assistant Secretary for Management and Budget.

SYSTEM NAME:

Financial Transactions of HHS Accounting and Finance Offices, HHS/

OS/ASMB.

SECURITY CLASSIFICATION:

None.

SYSTEM LOCATION:

See Appendix 1.

Memoranda copies of claims submitted for reimbursement of travel

and other expenditures while on official business may also be

maintained at the administrative office of the HHS employee. Records

concerning outstanding debts may also be maintained at the program

office or by the designated claims officer apart from the finance

office.

CATEGORIES OF INDIVIDUALS COVERED BY THE SYSTEM:

All persons who receive a payment from the Operating Divisions

(OPDIV) Headquarters, Area and District offices and all persons owing

monies to these HHS components. Persons receiving payments include, but

are not limited to, travelers on official business, grantees,

contractors, consultants, and recipients of loans and scholarships.

Persons owing monies include, but are not limited to, persons who have

been overpaid and who owe HHS a refund and persons who have received

from HHS goods or services for which there is a charge or fee ( e.g.,

Freedom of Information Act requesters).

CATEGORIES OF RECORDS IN THE SYSTEM:

Name, identification number, address, purpose of payment,

accounting

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classification and amount paid. Also, in the event of an overpayment

and for outstanding loans, grants or scholarships, the amount of the

indebtedness, the repayment status and the amount to be collected.

AUTHORITY FOR MAINTENANCE OF THE SYSTEM:

Budget and Accounting Act of 1950 (Pub. L. 81-784); Debt Collection

Act of 1982 (Pub. L. 97-365); Debt Collection Improvement Act of 1996

(Pub. L. 104-134, Sec. 31001).

PURPOSE(S):

These records are an integral part of the accounting systems at

OPDIVs Headquarters and specific Area and District locations. The

records are used to keep track of all payments to individuals,

exclusive of salaries and wages, based upon prior entry into the

systems of the official commitment and obligation of government funds.

When a person is to repay funds advanced as a loan or scholarship,

etc., the records will be used to establish a receivable record and to

track repayment status. In the event of an overpayment to a person, the

record is used to establish a receivable record for recovery of the

amount claimed. The records are also used internally to develop reports

to the Internal Revenue Service (IRS) and applicable State and local

taxing officials of taxable income. This is a Department-wide notice of

payment and collection activities at all locations listed in Appendix

ROUTINE USES OF RECORDS MAINTAINED IN THE SYSTEM, INCLUDING CATEGORIES

OF USERS AND THE PURPOSES OF SUCH USES:

1. Records will be routinely disclosed to the Treasury Department

in order to effect payment.

2. Records may be disclosed to members of Congress concerning a

Federal financial assistance program in order for members to make

informed opinions on programs and/or activities impacting on

legislative decisions. Also, disclosure may be made to a congressional

office from an individual's record in response to an inquiry from the

congressional office made at the request of the individual in order to

be responsive to the constituency.

3. In the event HHS deems it desirable or necessary, in determining

whether particular records are required to be disclosed under the

Freedom of Information Act, disclosure may be made to the Department of

Justice for the purpose of obtaining its advice.

4. A record from this system may be disclosed as a ``routine use''

to a Federal, State or local agency maintaining civil, criminal or

other relevant enforcement records or other pertinent records, such as

current licenses, if necessary to obtain a record relevant to an agency

decision concerning the hiring or retention of an employee, the

issuance of a security clearance, the letting of a contract or the

issuance of a license, grant or other benefit.

5. A record from this system may be disclosed to a Federal agency,

in response to its request, in connection with the hiring or retention

of an employee, the issuance of a security clearance, the reporting of

an investigation of an employee, the letting of a contract or the

issuance of a license, grant or other benefit by the requesting agency,

to the extent that the record is relevant and necessary to its decision

on the matter.

6. Where Federal agencies having the power to subpoena other

Federal agencies' records, such as the Internal Revenue Service (IRS)

or the Civil Rights Commission, issue a subpoena to HHS for records in

this system of records, HHS will make such records available, provided

however, that in each case, HHS determines that such disclosure is

compatible with the purpose for which the records were collected.

7. Where a contract between a component of HHS and a labor

organization recognized under E.O. 11491 provides that the agency will

disclose personal records relevant to the organization's mission,

records in the system of records may be disclosed to such organization.

8. A record may be disclosed to the Department of Justice, to a

court, or other tribunal, or to another party before such tribunal,

when: (1) HHS, or any component thereof; (2) Any HHS employee in his/

her official capacity; (3) Any HHS employee in his/her individual

capacity where the Department of Justice (or HHS, where it is

authorized to do so) has agreed to represent the employee; or (4) the

United States or any agency thereof where HHS determines that the

litigation is likely to affect HHS or any of its components, is a party

to litigation or has an interest in such litigation, and HHS determines

that the use of such records by the Department of Justice, the

tribunal, or the other party is relevant and necessary to the

litigation and would help in the effective representation of the

governmental party, provided however, that in each case, HHS determines

that such disclosure is compatible with the purpose for which the

records were collected.

9. A record about a loan applicant or potential contractor or

grantee may be disclosed from the system of records to credit reporting

agencies to obtain a credit report in order to determine the person's

credit worthiness.

10. When a person applies for a loan under a loan program as to

which the OMB has made a determination under I.R.C. 6103(a)(3), a

record about his/her application may be disclosed to the Treasury

Department to find out whether he/she has a delinquent tax account, for

the sole purpose of determining the person's creditworthiness.

11. A record from this system may be disclosed to the following

entities in order to help collect a debt owed the United States:

a. To another Federal agency so that agency can effect a salary

offset;

b. To the Treasury Department or another Federal agency in order to

effect an administrative offset under common law or under 31 U.S.C.

3716 (withholding from money payable to, or held on behalf of, the

individual);

c. To the Treasury Department to request the person's mailing

address under I.R.C. 6103(m)(2) in order to help locate the person or

to have a credit report prepared;

d. To agents of HHS and to other third parties, including credit

reporting agencies, to help locate the person or to obtain a credit

report on him/her, in order to help collect or compromise a debt;

e. To debt collection agents or contractors under 31 U.S.C. 3718 or

under common law to help collect a past due amount or locate or recover

debtors' assets;

f. To the Justice Department for litigation or for further

administrative action; and

g. To the public, as provided by 31 U.S.C. 3720E, in order to

publish or otherwise publicly disseminate information regarding the

identity of the person and the existence of a nontax debt.

Disclosure under part (d) and (g) of this routine use is limited to

the individual's name, address, social security number, and other

information necessary to identify the person. Disclosure under parts

(a)-(c) and (e) is limited to those items; the amount, status, and

history of the claim; and the agency or program under which the claim

arose. An address obtained from IRS may be disclosed to a credit

reporting agency under part (d) only for purposes of preparing a credit

report on the individual.

12. A record from this system may be disclosed to another Federal

agency that

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has asked HHS to effect an administrative offset under common law or

under 31 U.S.C. 3716 to help collect a debt owed the United States.

Disclosure under this routine use is limited to: name and address,

Social Security number, and other information necessary to identify the

individual; information about the money payable to or held for the

individual; and other information concerning the administrative offset.

13. Disclosure with regard to claims or debts arising under or

payable under the Social Security Act may be made from this system to

``consumer reporting agencies'' as defined in the Fair Credit Reporting

Act (15 U.S.C. Sec. 1681a(f)) or the Federal Claims Collection Act of

1986 (31 U.S.C. Sec. 3701(a)(3)). The purpose of this disclosure is to

aid in the collection of outstanding debts owed the Federal Government.

Disclosure of records is limited to the individual's name, address,

Social Security number, and other information necessary to establish

the individual's identity; the amount, status and history of the claim;

and the agency or program under which the claim arose.

14. Information in this system of records is used to prepare W-2s

and 1099 Forms to submit to the Internal Revenue Service and applicable

State and local governments items considered to be included as income

to a person: certain travel related payments to employees, all payments

made to persons not treated as employees (e.g., fees to consultants and

experts), and amounts written-off as legally or administratively

uncollectible, in whole or in part.

15. A record may be disclosed to banks enrolled in the Treasury

Credit Card Network to collect a payment or debt when the person has

given his/her credit card number for this purpose.

16. Records may be disclosed to a contractor (and/or to its

subcontractor) who has been engaged to perform services on an automated

data processing (ADP) system used in processing financial transactions.

The contractor may have been engaged to develop, modify and test a new

ADP system, including both software and hardware upgrades or

enhancements to such a system; perform periodic or major maintenance on

an existing ADP system; audit or otherwise evaluate the performance of

such an ADP system; and/or operate such a system.

17. Records may be disclosed to student volunteers, individuals

working under a personal services contract, and other individuals

performing functions for the Department but technically not having the

status of agency employees, if they need access to the records in order

to perform their assigned agency functions.

18. A record from this system may be disclosed to any Federal

agency or its agents in order to participate in a computer matching of

a list of debtors against a list of Federal employees. Disclosure of

records is limited to debtors' names, names of employers, taxpayers

identifying numbers, addresses (including addresses of employers), and

dates of birth, and other information necessary to establish the

person's identity.

19. A record may be disclosed to a commercial reporting agency that

a person is responsible for a current claim, in order to aid in the

collection of claims, typically by providing an incentive to the person

to repay the claim or a debt timely. Disclosure of records is limited

to information about a person as is relevant and necessary to meet the

principal purpose(s) for which it is intended to be used under the law.

20. A record from this system may be disclosed to the Treasury

Department or to an agency operating a Debt Collection Center

designated by the Treasury in order to effect a collection of past due

amounts.

21. If HHS decides to sell a debt pursuant to 31 U.S.C.

Sec. 3711(i), a record from the system may be disclosed to purchasers,

potential purchasers, and contractors engaged to assist in the sale or

to obtain information necessary for potential purchasers to formulate

bids and information necessary for purchasers to pursue collection

remedies.

Disclosure to Consumer Reporting Agencies

Disclosure pursuant to 5 U.S.C. Sec. 552a(b)(12): Disclosure may be

made from this system to ``consumer reporting agencies,'' as defined in

31 U.S.C. Sec. 3701(a)(3). The purpose of this disclosure is to aid in

the collection of outstanding debts owed to the Federal Government,

typically, to provide an incentive for debtors to repay their debts

timely, by making these debts part of their credit records.

Disclosure of records is limited to the individual's name, address,

social security number, and other information necessary to establish

the individual's identity; the amount, status and history of the claim;

and the agency or program under which the claim arose. The disclosure

will be made only after the procedural requirements of 31 U.S.C.

Sec. 3711(e) have been followed.

Policies and Practices for Storing, Retrieving, Accessing, Retaining,

and Disposing of Records in the System

STORAGE:

Hard copy documents are maintained in file folders at agency

headquarters and area/district office sites; and on computer disc pack

and magnetic tape at central computer sites.

RETRIEVABILITY:

This varies according to the particular accounting system within

the HHS Operating Divisions, Area and District Offices. Usually the

hard copy document is filed by name within accounting classification.

Computer records may be indexed by social security number and voucher

number. Intra-departmental uses and transfers concern the validation

and certification for payment, and for HHS internal audits.

SAFEGUARDS:

1. Authorized Users: Employees and officials directly responsible

for programmatic or fiscal activity, including administrative and staff

personnel, financial management personnel, computer personnel, and

managers who have responsibilities for implementing HHS funded

programs.

2. Physical Safeguards: File folders, reports and other forms of

personnel data, and electronic diskettes are stored in areas where fire

and life safety codes are strictly enforced. All documents and

diskettes are protected during lunch hours and nonworking hours in

locked file cabinets or locked storage areas. Magnetic tapes and

computer matching tapes are locked in a computer room and tape vault.

3. Procedural Safeguards: Password protection of automated records

is provided. All authorized users protect information from public view

and from unauthorized personnel entering an office. The safeguards

described above were established in accordance with HHS Chapter 45-13

of the General Administration Manual; and the HHS ADP System Manual

Part 6, ``ADP Systems Security.''

RETENTION AND DISPOSAL:

Records are purged from automated files once the accounting purpose

has been served; printed copy and manual documents are retained and

disposed of in accordance with General Accounting Office principles and

standards as authorized by the National Archives and Records Service.

[[Page 761]]

SYSTEM MANAGER(S) AND ADDRESS:

Department of Health and Human Services, DHHS, Assistant Secretary

for Management and Budget, Office of the Secretary, Room 510A, Hubert

H. Humphrey Building, Washington, DC 20201.

NOTIFICATION PROCEDURE:

Inquiries should be made, either in writing or in person, to the

organizations listed under ``Location'' in Appendix 1, with the

exception of Food and Drug Administration records. For those records,

contact:

FDA Privacy Act Coordinator (HFW-30)

Food and Drug Administration

5600 Fishers Lane

Rockville, MD 20857

The individual making the inquiry must show proof of identity

before information is released. Give name and social security number,

purpose of payment or collection (travel, grant, etc.) and, if

possible, the agency accounting classification.

Record Access Procedures:

Same as notification procedures. Requesters should also clearly

specify the record contents being sought, and may include a request for

an accounting of disclosures that have been made of their records, if

any. (These access procedures are in accordance with HHS regulations

(45 CFR 5b.5(a)(2)).)

Contesting Record Procedures:

Contact the official at the address specified under notification

procedure above, and reasonably identify the record and specify the

information being contested, the corrective action sought, and the

reasons for requesting the correction, along with supporting

information to show how the record is inaccurate, incomplete, untimely,

or irrelevant.

Record Source Categories:

Travel vouchers submitted by the individual; grant, contract and

loan award document; delinquent loan, grant and scholarship record;

consultant invoice of services rendered; and application for travel

advance.

Exemptions Claimed for the System:

None.

Appendix 1

Location

Indian Health Service Area Offices (IHS)

Aberdeen Area, IHS

Federal Building

115 Fourth Ave., SE

Aberdeen, SD 57401

Alaska Area, IHS

250 Gambell Street

Anchorage, AK 99501

Albuquerque Area, IHS

505 Marquette NW

Suite 1502

Albuquerque, NM 57102-2163

Albuquerque Headquarters West, IHS

300 San Mateo, NE

Suite 500

Albuquerque, NM 87108

Bemidji Area, IHS

203 Federal Building

Bemidji, MN 56601

Billings Area, IHS

711 Central Avenue

Billings, MT 59103

California Area, IHS

1825 Bell Street

Sacramento, CA 95825-1097

Nashville Area, IHS

3310 Perimeter Hill Drive

Nashville, TN 37211

Navajo Area, IHS

P.O. Box ``G''

Window Rock, AZ 86515-5004

Oklahoma Area IHS

3625 NW 56th Street

Five Corporation Plaza

Oklahoma City, OK 73112

Phoenix Area, IHS

3738 North 16th Street

Suite ``A''

Phoenix, AZ 85016-5981

Portland Area, IHS

1220 SW Third Avenue

Room 476

Portland, OR 97204-2892

Office of Health Program Research and Development, IHS

7900 South ``J'' Stock Road

Tucson, AZ 85746-9352

Food and Drug Administration District Offices (FDA)